China’s Gross Domestic Product grew at an annual rate of 6.7% in the first quarter of the year, says the government.
This is the lowest rate since 2009 for the second world power; but comfortably within the government’s targeted range.
In fact, whilst Beijing is supporting the industrial economy to maintain the decrease to an acceptable level, other sectors like the internet and technologies are growing.
All China’s bet consists to drive a gentle slowdown in the economy to rest the economic growth more on consumption and services, and less on the industry.
The industry and the financial sector have been standing idle in China since 2009, right from the start of the Subprimes’ crisis.
Besides, China’s economy needs to do with the sword of Damocles which represents its excessive debt. Only on the level of companies, the debt represents 160% of the GDP in 2016, versus 98% in 2008 according to Standards & Poors.
Finally, the deceleration is slower than anticipated by some economists. However, this support policy will have to continue if China’s government wants to reach its goal.
Valentin Demay, IEJ 1 Bis
Bad news for the Italian economy. The third economy of the euro zone is plunged on its longest recession period since the end of the Second World War.
Figures about the Italian unemployment were published last Friday. They seemed a little bit less discouraging, but they are already criticized by the National Statistics Institute. This Institute has revised downwards the GDP and the growth rate. Next year, the growth will only be of +0.5%, whereas the Institute banked on 1% last May. It’s already the third consecutive year of recession for Italy.
The institue explains this downgrading by the weakness of perspectives for the international trade and for the investments in Italy in the 2014-2016 period.
«The Matteo Renzi government has sinned by excess of optimism. Stability law (the budget) adopted on the 14th of October by the Cabinet will probably not have the expected effects on the growth for the two next years,» has declared the National Statistics Institute. The unemployment will reach 12.5% this year (+0.3% compared with 2013). The Italian status depends on the orientations that will take the ECB and the Jean-Claude Juncker Commission. This commission promises to unfreeze 300 billion euros of investments for the country. However, the government also has to carry out structural reforms.
Paul Blin Kernivinen, IEJ,3E1
This afternoon, the budget of the social security is voted in the National Assembly.
This text plans 9.6 billion savings: around 40 Socialist deputies, called “the rebellious” or “the opponents” abstained, according to the sources of AFP. Among these opponents we count now the ecologists who joined this group. Last week, the government showed unity. And, this situation was anticipated by the Minister of health Marisol Touraine who says that “the rebellious should approach this vote “with responsibility”. We can say that the socialist opponents did not really listen to the Minister. Their abstention proves well that they disagree: they oppose in this kind of economy for 2015, which concerns family, more, exactly the family allowances.
By Clélia Bourriot, IEJ 3E
« Not too tough, not too lenient », is the response to the European central Bank’s stress tests on the 123 biggest European banks.
The stress tests are used to test solidarity of a bank’s balance in case of economic crises. These tests should anticipate the worst case.
Some banks have failed the tests, whereas others have been reassured. The sector is on the mend. All four UK banks passed the tests. In London, Lloyds Banking Group, have avoided narrowly the stress tests. In France, only one bank out of thirteen has failed the tests.
In Milan, two Italian banks were suspended. Greece, Cyprus and Portugal are worried.
Twenty five banks out of hundred thirty tested by the ECB, will have to submit a recovery plan.
If the bank cannot recover, taxpayers or the State, will have to contribute to save the bank concerned by the recovery plan.
By BELHAMSALI Saïd, IEJ 3E
French’s Finance Minister Bernard Cazeneuve expects much lower revenue due to the European crisis.
As Brussels just approved the French budget for 2014, the government made a significant revision of 5.5 billion less than estimated.
The previous French budget had been established at over 11 billion euros but the crisis had a great impact on the French economy.
The growth had been around 0.5% in the second quarter but now the third quarter is down to 0.1% from the gross domestic product (GDP).
Indeed, the French government has been dealing with the crisis since 2008 and still doesn’t succeed to reach their economic aim.
Furthermore, French companies are still dismantling, which doesn’t incite both investments and purchase.
The most important consequence is that factories have not sufficient growth to invest, pay taxes and revenues to the French government.
“About the VAT, there is a gap of about a billion euros, and four billion euros on the tax imposed on the factories,” said Bernard Cazeneuve on French news TV, BMFTV.
Steeven Ballein 3F1